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8/22/2013 4:08PM

Cato: Obama Education Plan Short on Details

President Obama laid out proposals aimed at reining in rising tuition costs by creating a new system to rate colleges and eventually tying federal student aid to the institutions' performance. Neal McCluskey, CATO Institute associate director, joins the News Hub to discuss. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... the ... the bomb on a two-day boss saw of New York and Pennsylvania calling for college financial aid to be tied to a system that rates performance among institutions ... cyclists ... two medicines are facing a choice that they should never happen ... either they say go to college ... and pay the price for not getting a degree of that surprise that last a lifetime ... were you know what it takes to go to college ... the venue on the rest home builder that often gets a much better ... we move forward on these three fronts the increasing value encouraging innovation ... helping people responsibly manage their debt ... I guarantee you that ... we will help more students for college ... I was present Obama ... joining me now is New McCloskey is associate director of the Center for educational freedom advocates every Institute thank you for joining us up ... when traveling ... when you think of present Obama sweating system is is this the wind way to do things ... will pursue knows we don't actually know the details of the rating system ... so the president talked about what you would include some things like ... um ... default rates on loans graduation rates to wish and prices and things like that ... but we don't have a full list of what we're going to the rating system or we don't know how the different components would be waited ... for not going to get the attic or in the present till twenty fifty ... so I think it's very problematic to try and have you know five ten variables to use ... to assess something as unique as colleges and students in things like that ... but we don't know how good or bad it might be until we have lots of the as of yet on available information the house to be constructed set your price anyone is saying is that Apple will be in that the trial so aam ... its governments ... getting getting involved in this ... what does it stand any chance of making will call if more accessible ... what if you just forget the first part of what he propose which is this rating system ... again we don't know the de tails of that we have some idea what components Adobe ... most of things he talked about me and there you can already easily get again and the U S News World Report to get it from PayScale lots of different places so ... data alone is what you have no impact whatsoever ... the question is will they ultimately connects this rating system to ... stem a because the Fed are provided ... by far the biggest amount of money that goes to colleges groups to use ... and he didn't say what ultimately we want to connect your rating to how much you made some can bring ... the were not supposed to the D tells on that until two thousand eighteen ... and then whatever program there has to get through Congress so until we know that if it ever even happens there's really an amino force behind this ... two things can ... change from the government's if you like fat federal student loans all federally backed Shia vases of the problem here ... oh absolutely federal aid is probably the primary driver ... of massive price inflation and that's with the president is trying to address ... you know sort of like if you can go into a hot dog vendor you pay the dollar for a hotdog ... gopher or adhere to when somebody comes and says here's here's another dollar native your original ballot ... and here's another dollar were to vendors to do specially barely gets a dollar in charge of ... two dollars ... we seen colleges and universities doing that for decades because the federal government said what will enable you to pay what ever does they wanna charge ... so how do we get away from Adam and what one of the issues as of these institutions out ... of the CBD with enormous revenue coming in nature I'm and an infrastructure ... to support that revenue ... how can we get away from that without them having to slim down massively which will mean huge smiles ... well we are so you want them to slim down massively ... yes in the short term it may mean layoffs that may mean fewer people going to college but look ... we have people going to college for six years or more who were leaving without any sort of skills that employers want for the third of college graduates are in jobs don't require their degree about half of people who enter college ... art fashion we had massive credential inflation we on this inquiry and inflation ... it is just a giant sinkhole of waste to eliminate the hat ... that we eliminate that by having people pay with their own money or money they get voluntarily from other people that ultimately eleven education system that is effective and efficient of giving people the skills ability they need and not a whole lot of